5G: enabling innovation in robotics and automation

In this edition we look at how 5G telecom technologies will be a critical element in enabling a broad range of novel applications and innovations in the field of robotics and automation.

October 2, 2020

Angus Muirhead

CFA, Portfolio Manager, Credit Suisse Asset Management

With 5G and other technology building blocks in place, the stage is now set for a golden age of innovation in the robotics and automation market. Considering the very large market potential in many sectors of the economy and the low levels of penetration of many automation solutions, we believe the long-term outlook for the Robotics and Automation theme remains compelling.

What is 5G?

5G is the “5th Generation” of cellular technology standards defined primarily by 3GPP, the body that agrees global cellular communication standards. 5G is not one thing, but a number of improvements in the hardware and software of the whole infrastructure involved, from antennas, through telecom towers, base stations, mobile phones, and all other wirelessly connected devices.

In combination, these improvements will deliver much faster data speeds, lower latency, close to zero failure rate, and the ability to connect a far greater number of users and connected devices simultaneously, compared to the current 4G technologies.

Alternate text

Figure 1. The improvements offered by 5G

Sources: Credit Suisse, Thales (Gemalto), “Introducing 5G technology and networks (definition, use cases and rollout)”, 2019.

At the end of the 1970s, the first generation of mobile telecoms technology, which in retrospect we call 1G, enabled voice communications based on analog technologies. Then in the 1990s, 2G gave us text messaging (SMS) and sparked a boom in pagers or beepers. 3G launched in 2001, and gave us email and photos, triggering the race to build ever better cameras into mobile phones. 4G, which arrived in 2009, took this a step further, giving us streaming video, social media, and services such as ride sharing.

Fit for purpose

Consumers may view 5G simply as the next phase in this steady progression, but there is a significant difference, which will make the step to 5G a much more material change for many applications in business and government.
The difference stems from the fact that 5G can operate on a much broader range of radio frequencies than current 4G technologies. While 4G operates in a narrow band of spectrum below 2.5 GHz, 5G, in contrast, operates in a significantly larger range from sub-1 GHz to up to 95 GHz.

This gives telecom operators a far greater potential spectrum capacity and since low frequency signals offer different characteristics to high frequency, it allows the operator to segregate bands of frequency for different use cases.

media gallery caption

Figure: 2. Fit for purpose: recommended use-cases

Sources: Credit Suisse, ITU-Telecom, “Minimum requirements related to technical performance for IMT-2020 radio interface(s)”, November 2017. Credit Suisse Asset Management.


Since the broad range of frequencies is suited to different use cases, McKinsey2 believes that telecom operators will choose to roll out 5G in waves, with the first wave designed for data-hungry consumer glued to their mobile phones, and the second and third waves geared more to business and government and connected devices known as the “internet of things”. McKinsey notes (Figure 3.) that while the consumer market (enhanced mobile broadband, or eMBB) is likely the most easily accessible and uniform, being viewed as a simple upgrade for the mobile subscriber, the third wave (massive machine-type communication, or mMTC), suited to business and government applications will likely take longer to develop, but will ultimately become a much larger market.

For consumers, the improvements in speed and connectivity offered by 5G will likely be happily received and, for a while at least, some may be willing to pay a premium for the service. Data volumes and “screen time” will likely rise. Ericsson predicts that by 2025 smartphones around the world will consume 164 Exabytes of mobile data per month, a five-fold increase on 2019.3 The trend will likely be similar across global markets and drive improvements in our smartphones, such as greater memory capacity and higher resolution cameras, as well as increasingly data-rich content, and better, more affordable data plans. But despite the expected increase in usage and data traffic, 5G seems unlikely, at least in the first few years of adoption, to radically change how the consumer uses the mobile internet.

media gallery caption

Figure 3. Forecast for the number of devices connected to 5G networks

Source: McKinsey: “The 5G era: New horizons for advanced electronics and industrial computers”. 21 Feb 2020, Report.

The industrial wave

In contrast, the improvements of low latency, reliability, and speed offered by the mid and high frequency bands are likely to be critical in enabling a number of new services and applications for business and government. Let us look as some examples:

Autonomous vehicles and many advanced driver assistance systems (“ADAS”) need to “understand” a vast and highly varied environment and correctly respond to every scenario in every condition, no matter the time of day or the weather conditions. For a computer to learn that number of possibilities is a huge challenge and rather than placing a super computer in every vehicle, it makes sense for vehicles to share and connect to a common repository of data stored in the cloud. Clearly though, this data needs to be accessed quickly and reliably every time, since even a split second delay may be the difference between life and death. 5G has the potential to enable this.

media gallery caption

Image 1. An illustration of the Advanced Driver Assistance System from Veoneer Inc.

Picture used with kind permission from Veoneer Inc.

5G standards require an outage, or failure, rate of just 0.00001 (or, 10-5). This is approximately five thousand times better reliability than 4G. In addition, latency rates are required to be less than 1 millisecond, with zero interruption if the device or user moves from one cell to another.4

"We need to look at how long it takes for the message to be transmitted between sensors and then to get to the computer in each car and then how long it takes for the computer to make a decision, and all of this has to be in less time than a human would take to make a decision. We need a network supporting this and 5G is that network." Jane Rygaard, Nokia - Head of Dedicated Wireless Networks (5)

The average reaction time for humans to visual stimulus is 250 milliseconds (¼ of a second) and approximately 190 ms for professionally trained drivers.6 A car travelling at 100 kmph would therefore travel approximately 30 meters before the average human reacts and applies the brake. If an autonomous vehicle could react in 10 ms, then the vehicle would only travel 30 cm before the brake is applied, a significant improvement, and as processing times improve, reaction speeds of 1-2 ms may become possible.4 The speed and reliability of 5G are critical to enable this.

5G can also connect far more devices than 4G. Estimates suggest that 1 million devices per square kilometer should be possible and therefore it becomes far more practical to connect all infrastructure on the road, such as traffic lights, speed and warning signs, as well as pedestrians and bicycles. This real-time information will allow traffic flow to be better managed, congestion reduced, safety improved, and even to assist in finding parking spaces.

Healthcare. Just as 5G will save lives with improved road safety, it will also help transform the healthcare industry. As more and more personal healthcare data is generated for patients, 5G will enable this data to be shared seamlessly in real time. Even huge data files, such as MRI images, can be shared quickly and reliably with other physicians and experts. 5G will also allow enable greater use of telemedicine by making available enough spectrum to support significant growth in demand for high-quality video conferencing between physician and patient.

In addition, the rising popularity of wearable sensors for continuous health tracking and diagnostics both in the hospital and at home will demand more bandwidth than is currently available on 4G. According to Anthem, a US health insurer, 86% of physicians say that wearable devices for remote monitoring increases patient engagement with their own health and wearables are expected to lower hospital costs by 16% over the next five years.7

Industry. In a modern factory, machines, sensors, robotics, and other forms of automation equipment are connected to a network and can share data and respond to one another in real-time, without human involvement.
However, these machines are generally fixed in place and plugged into the mains electricity and into the factory network. The high reliability and low latency offered by 5G makes it plausible to cut the cord and untether the machines (assuming they can be powered sufficiently with batteries, or receive a charge at various docking terminals), making them free to move around the factory floor.

Potentially this makes the machines more useful and makes the factory floor space more flexible and makes it possible to adjust production lines more quickly. These advantages may enable faster throughput and shorter lead-times.

"I think 5G will be the digital backbone that transforms the way we do smart manufacturing. [With] 5x lower latency and about 1,000x more data volume, industries can dare to cut their cables and move more into fully flexible production." Erik Joseffon, VP and head of advanced industries at Ericsson (8)
Logistics. Beyond the factory, there are great opportunities to improve efficiency and flexibility in supply chains and logistics by adding more layers in intelligence and sensors through the process. The ability of 5G to connect millions of devices simultaneously opens up the possibility to track every single item individually over the mobile network.
media gallery caption

Figure 4. Forecast for the number of devices connected to 5G networks

Sources: Credit Suisse, 5G-Alliance for Connected Industries and Automation (a working party of ZVEI), microsite: “Making Industry 4.0 happen – How it can be used?” 2020.


Our conviction in the robotics and automation theme as a long-term investment opportunity is based on the fact that we see a rising tide of innovation, an increasingly varied range of use-cases and applications, and a large number of new ventures entering the market.
We believe this is happening because the building blocks for technology innovation, including building robotics and automation solutions, are more accessible and affordable today than ever before and there is a growing population of people who know how to put these pieces together. In this Insight we have seen how 5G is a critical enabler for several significant areas for automation. There are of course yet more, such as agriculture, security, climate change, and defense, which we have not discussed here.
We believe that with 5G and other building blocks in place, the stage is now set for a golden age of innovation in the robotics and automation market. Considering the very large market potential in many sectors of the economy and the continuous search for productivity growth, the challenges of labor shortages and increasing regulation, we think it likely that a large part of R&D and innovation will focus on the robotics and automation opportunity.
There will be challenges along the way, such as cyber security risks, battery life limitations, social and political concerns about the impact of automation on the workforce, and environmental concerns around the carbon footprint of operating millions of connected devices. However, in most areas, we believe the benefits significantly outweigh the challenges and we are convinced of the power of this theme as an investment opportunity for the long-term.
Credit Suisse Asset Management has designed strategies to provide clients with “pure-play” exposure to a number of compelling and complementary long-term secular growth themes including Robotics & Automation, Security & Safety, Digital Health, Edutainment, and Environmental Impact.


  • No capital protection: investors may lose part or all of their investment in this theme.
  • The emphasis on robotics companies can create significant exposure to certain sectors or regions.
  • Exposure to small and mid caps can result in higher short-term volatility and may carry liquidity risk.
  • Due to the possibility of increased exposure to the emerging markets, the strategy may be affected by political and economic risks in these countries.
  • Equity markets can be volatile, especially in the short term.

1. 3GPP (, “Release 16 – The 5G System”, last update: July 2020.
2. Source: McKinsey: “The 5G era: New horizons for advanced electronics and industrial computers”. Feb. 21, 2020, Report.
3. Source: Ericsson: “Ericsson Mobility Report – Mobile traffic outlook”, June 2020.
4. Source: ITU-Telecom, “Minimum requirements related to technical performance for IMT-2020,” November 2017.
5. BBC News report: “Will 5G be necessary for self-driving cars,” by Mary-Ann Russon, September 26, 2018.
6. Thales (Gemalto), “Introducing 5G technology and networks (definition, use cases and rollout),” 2019.
7. Forbes magazine, “The 5G and IoT revolution is coming,” by Randal Kenworthy, November 18, 2019.
8. SME article (, “Ericsson, Hexagon cook up an example of 5G in action”, 17 July 2020.


Fee Disclosure
Where permitted by law, we may receive fees, commissions or other monetary benefits in connection with this product from third parties. For details please refer to your Fee Schedule or contact your Relationship Manager.

If you are not a client of Credit Suisse UK Ltd
If you are not a client of Credit Suisse, please note that this document has been provided to you for information purposes only as an example of the type of products we are able to offer to you should you become a client of Credit Suisse. The provision to you of this document does not constitute an invitation or inducement to buy or sell any security or other financial investment, nor does it constitute an advice or personal recommendation. Should you wish to invest in any products, you will have to go through our account opening process which involves providing us with details of your personal and financial circumstances, risk appetite and investment objectives as well as selecting the most appropriate portfolio mandate for you. We can thereafter work with you to determine which investments are suitable or appropriate for you.

Marketing Disclaimer
This document is provided to you for your information and discussion only. It is not a solicitation or an offer to buy or sell any security or other financial instrument. Any information including facts, opinions or quotations, may be condensed or summarised and is expressed as of the date of writing. The information may change without notice and Credit Suisse (UK) Limited (“Credit Suisse”) is under no obligation to ensure that such updates are brought to your attention. The price and value of investments mentioned and any income that might accrue could fall or rise or fluctuate. Past performance is not a guide to future performance. If an investment is denominated in a currency other than your base currency consult with such advisor(s) as you consider necessary to assist you in making these determinations. Nothing in this document constitutes legal, accounting or tax advice. Credit Suisse does not advise on the tax consequences of investments and you are advised to contact a tax advisor should you have any questions in this regard. The levels and basis of taxation are dependent on individual circumstances and are subject to change. This document has been prepared from sources Credit Suisse believes to be reliable but we do not guarantee its accuracy or completeness and do not accept liability for any loss arising from its use. Credit Suisse reserves the right to remedy any errors that may be present in this document. Credit Suisse its affiliates and/or their employees may have a position or holding, or other material interest or effect transactions in any securities mentioned or options thereon, or other investments related thereto and from time to time may add to or dispose of such investments. Credit Suisse may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment to any company or issuer mentioned. Some investments referred to in this document will be offered by a single entity or an associate of Credit Suisse or Credit Suisse may be the only market maker in such investments. This document is intended only for the person to whom it is issued by Credit Suisse. It may not be reproduced either in whole, or in part, without our written permission. The distribution of this document and the offer and sale of the investment in certain jurisdictions may be forbidden or restricted by law or regulation. Investments may have no public market or only a restricted secondary market. Where a secondary market exists, it is not possible to predict the price at which investments will trade in the market or whether such market will be liquid or illiquid. Where such investments will not be listed or traded on any exchange, pricing information may be more difficult to obtain and the liquidity of the investments may be adversely affected. A holder may be able to realise value prior to an investment’s maturity date only at a price in an available secondary market. The Issuer of the investment may have entered into contracts with third parties to create the indicated returns and/or any applicable capital protection (in part or in full). The investment instrument's retention of value is dependent not only on the development of the value of the underlying asset, but also on the creditworthiness of the Issuer and/or Guarantor (as applicable), which may change over the term of the investment instrument. In the event of default by the Issuer and/or Guarantor of the investment and/or any third party, the investment or any income derived from such contracts is not guaranteed and you may get back none of, or less than, what was originally invested. Parties other than the Issuer or Guarantor (as appropriate) mentioned in this document (for instance the Lead Manager, Co-structurer, Calculation Agent or Paying Agent) do neither guarantee repayment of the invested capital nor financial return on the investment product, if nothing is indicated to the contrary. You may have to accept smaller returns on an investment relative to a direct investment in the underlying index, basket, etc. because of the costs involved in providing the capital protection. Such capital protection normally only applies if the investment is held until maturity. The amount of initial capital to be repaid may be geared, which means that a fall in the underlying index or securities may result in a larger reduction in the amount repaid to investors. Where this document relates to packaged products (such as regulated collective investment schemes), any advice offered to retail clients is based on a selection of products from the whole of the market. Where this document relates to emerging markets you should refer to the Risk Disclosures section of the Credit Suisse Terms of Business. Additional information is, subject to duties of confidentiality, available from Credit Suisse upon request. Hedge Fund strategies may include the use of leverage (borrowing) and derivative instruments resulting in certain risks, some of which are as follows: leveraged investments, by their nature, increase the potential loss to investors resulting from any depreciation in the value of such investments. Consequently, a relatively small price movement in a leveraged instrument may result in a substantially greater loss to the Hedge Fund. The market in some of the investments made as part of a Fund’s strategy may be relatively illiquid, giving rise to potential difficulties in valuing and disposing of such investments. Information for determining the value of investments held by a Fund may not be readily available which has corresponding implications for the overall valuation of a Fund. Accurate risk profiling of the Fund holdings may also not be readily available. Always refer to the Fund’s Prospectus and/or the Key Investor Information Document before making an investment. Your personal data will be processed in accordance with the Credit Suisse Privacy Policy published at Credit Suisse (UK) Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority for the conduct of investment business in the United Kingdom. The registered address of Credit Suisse (UK) Limited is Five Cabot Square, London, E14 4QR. If you have any questions regarding the document, please contact your Relationship Manager.

© Credit Suisse (UK) Limited 2020.